Is Canada About to Gift Money to Nvidia?

Industry Minister Francois-Philippe Champagne has announced that Canada has signed a letter of intent with Nvidia, the California-based artificial intelligence (AI) chip giant, in a bid to enhance the country’s computing power. The move comes as nations globally prioritize the development of AI infrastructure, with Nvidia’s recent valuation surpassing $1.5 trillion.

The letter of intent, revealed through a post on X (formerly Twitter), was signed during Nvidia CEO Jensen Huang’s visit to Toronto on Thursday. The specifics of the agreement were not disclosed by either party.

“I’m in Toronto this evening to sign a letter of intent with Jensen Huang, CEO of @nvidia — a global leader in AI chips,” Champagne posted. “This means that we will explore opportunities to work together on creating AI computing power in Canada.”

Champagne highlighted the importance of securing support to ensure Canada’s access to cutting-edge technology, allowing the country to build its own infrastructure with the necessary funding.

Huang expressed enthusiasm about the collaboration, stating, “We’ve been a partner of Canada since the beginning of deep learning, and so this is a very important region for us to invest in, a very important country for us to invest in.”

While acknowledging the global focus on AI infrastructure in countries such as Japan, South Korea, Malaysia, Singapore, Britain, France, and Italy, Huang emphasized the unique opportunity for Canada. He considers Canada the birthplace of modern AI, attributing this status to the contributions of AI pioneers Yoshua Bengio and Geoffrey Hinton, who conducted groundbreaking research in the country.

Despite the strong AI research presence in Canada, concerns have been raised about the country’s slipping global ranking in AI talent and capacity, as reported by U.K. firm Tortoise. Stephen Toope, president of the Canadian Institute for Advanced Research, expressed apprehension about the decline and emphasized the importance of government encouragement and support for young researchers.

Huang, while acknowledging Canada’s research and talent, addressed the need to provide opportunities for researchers post-graduation. He spoke at an event in Toronto alongside representatives from autonomous driving company Waabi, AI firm Cohere, the Vector Institute, and drug discovery company Deep Genomics.

“More corporate welfare”

The recent announcement has drawn criticism from some observers. Concerns have been raised about the potential financial burden on taxpayers, with one user questioning, “How much are the taxpayers going to be on the hook for this one? Is it gonna be $1 billion?”

In response to the letter of intent between Canada and Nvidia, another skeptic asked, “A letter of intent to do what? More corporate welfare I see.” This sentiment reflects a common critique of government initiatives perceived as providing undue financial support to large corporations.

Some critics argue for a focus on making Canada an attractive destination for companies without resorting to financial incentives. One commentator remarked, “Make Canada attractive without having to bribe these wealthy companies” while another took a jab at the government’s priorities, commenting sarcastically that the move could probably “see if AI can solve the high grocery prices from Loblaws who hold a monopoly on the grocery sector.”

Information for this briefing was found via The Globe And Mail and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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